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Several hundred people were waiting to get into the J.C. Penney store in Dallas at Timber Creek shopping center on Thanksgiving Day 2013. (DMN staff photo by G. J. McCarthy)

J.C. Penney’s stock is up about 5 percent today after Piper Jaffray analysts offered support for the Plano-based retailer’s turnaround efforts.

Piper Jaffray concluded that Wednesday’s stock price dive based on Penney’s thin press release about December sales was a big “overreaction.”

Analysts Neely Tamminga and Kayla Berg raised their rating on Penney stock from neutral to overweight and reiterated an $11 stock price.

“We believe the real message in yesterday’s release is being missed: J.C. Penney is doing what they said they would do, and we believe any retailer reiterating their guidance following this compressed, promotional, mall-traffic-starved holiday season is a winner in our book.”

That combined with liquidity concerns being off the table for a while, was behind the rating increase.

J.C. Penney has filled its two spots on the board of directors at Martha Stewart Living Omnimedia with Robert Peterson and Michael Zacharia.

Peterson is senior vice president of corporate strategy at Penney and Zacharia is a consultant and attorney with experience in retail and government.

Two former top Penney executives hired by ousted CEO Ron Johnson had represented Penney on the Martha Stewart Living board as part of Penney’s equity investment in the home diva’s company. When chief operating officer Michael Kramer and chief talent officer Dan Walker left Penney, they also left the Martha Stewart board.

Peterson was global head of equities at Piper Jaffray before joining Penney in July 2012. So since he’s representing Penney in this case, he apparently has survived the shakeout at the corporate headquarters after Johnson’s departure in April.

Zacharia and Penney CEO Myron “Mike” Ullman have some common background.

Zacharia was executive vice president and general counsel at DFS Group Limited. Ullman is a former CEO of the world’s largest travel retail company. Both have government in their early careers. During the Reagan Administration Ullman and Zacharia were White House Fellows together.

J.C. Penney chief executive Ron Johnson on Tuesday addressed a growing criticism about why Penney didn’t test its new marketing and pricing strategy before implementing it on Feb. 1.

Penney’s first-quarter sales decline of 20 percent flamed criticism and raised the question of why management made a leap-of-faith decision to transform the department store before it tested its key pricing changes.

“We debated whether there was a way to test. We knew sales would decline initially, but if we tested the pricing in one region we couldn’t reduce expenses,” Johnson said Tuesday morning at the Piper Jaffray Consumer Conference in New York.

A test in one region would have required two staffs, he said. “We would have needed everyone to run the old business model and would have had to add new people to run a test in 10 percent of our stores.”

“We couldn’t do that. We wouldn’t have been able to cut our expenses. We knew the customer would love the new strategy. We decided to get on with our future.”

Johnson said everyone in management had experience with the pricing model they were implementing. “We had done this at Target and knew it could be done. We wanted to move forward.”

The transition is tough and sales will decline this year, he said. “We are getting smaller to get big again.”

He used a new analogy from Apple when the company made a decision to switch to a new faster Intel processor back in 2001-02. The decision had to be made and announced a year ahead so software makers had time to adapt to the new operating system in Apple computers.

“That year I think Apple sales fell 40 percent,” he said. “It was a bad year and Apple got to the other side. It was a bold decision.”